Fitch: Genworth Financial Announces Upcoming LTC Review

July 31, 2014 01:43 PM Eastern Daylight Time

CHICAGO--(BUSINESS WIRE)--On July 29, 2014, Genworth Financial, Inc. (NYSE: GNW) announced that
second quarter 2014 long-term care (LTC) results decreased by $66
million after-tax versus the prior year primarily from higher severity
and frequency on new and existing LTC claims, according to Fitch
Ratings. Further, the company announced that it would be conducting a
comprehensive review of the adequacy of its LTC claim reserves during
the third quarter of 2014.

Fitch's ratings on GNW consider the company's large exposure to the LTC
insurance market, which continues to be challenged by under-performing
legacy business and the ongoing low interest rate environment. While the
current ratings assume some level of LTC earnings and reserve
volatility, one of Fitch's previously established downward rating
triggers for GNW was a material ($500 million or more) earnings charge
from adverse development of LTC reserves. Depending on the size of any
charges taken in the third quarter, Fitch may review the ratings of GNW
and the review could result in a revision in the Outlook to Negative or
a rating downgrade.

On June 3, 2014, Fitch affirmed the ratings on Genworth Life Insurance
Company, Genworth Life and Annuity Insurance Company, and Genworth Life
Insurance Company of New York (collectively, Genworth Life).

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